PBCO Financial Corporation Reports Q2 2024 Earnings

Rhea-AI Summary

PBCO Financial reported net income of $1.8 million and earnings per diluted share of $0.33 for Q2 2024, up from $1.7 million and $0.31 in Q1 2024. Key highlights include:

- Net interest margin expanded to 3.49%, marking the third consecutive quarter of growth
- Non-interest bearing deposits increased by 5.1%, with total deposits up 2.1% quarter-over-quarter
- Loan portfolio grew 6.8% year-to-date
- Tangible book value per share rose to $14.56 from $14.05 in Q1

The bank maintained a strong capital position with a Tier 1 Capital Ratio of 11.62% for PBCO Financial and 13.44% for the Bank. Despite challenges, the company focused on expense management and risk mitigation while pursuing growth opportunities.

Positive

• Net income increased to $1.8 million from $1.7 million in the previous quarter
• Earnings per diluted share rose to $0.33 from $0.31 quarter-over-quarter
• Net interest margin expanded by 18 basis points to 3.49%
• Non-interest bearing deposits grew by 5.1%
• Total deposits increased by 2.1% compared to the previous quarter
• Loan portfolio grew by 6.8% year-to-date
• Tangible book value per share increased to $14.56 from $14.05
• Tier 1 Capital Ratio improved to 11.62% from 11.38% in the previous quarter

Negative

• Non-interest expenses increased by $313 thousand from the previous quarter
• Securities income decreased to $0.58 million from $0.62 million in the previous quarter
• Bank wrote down an OREO property by $66 thousand and booked a loss-on-sale of $5 thousand

MEDFORD, Ore.--(BUSINESS WIRE)-- PBCO Financial Corporation (OTCPK: “PBCO”), the holding company (Company) of People’s Bank of Commerce (Bank), today reported net income of $1.8 million and earnings per diluted share of $0.33 for the quarter ended June 30, 2024, compared to income of $1.7 million and $0.31 per diluted share for the quarter ended March 31, 2024.

Highlights

• Net interest margin of 3.49% which expanded by 18 basis points compared to prior quarter and represents the third consecutive quarter of margin expansion
• 5.1% increase in non-interest bearing deposits and 2.1% increase in total deposits compared to prior quarter-end
• Loan portfolio increased by 6.8% year-to-date
• Tangible book value per share increased to $14.56, compared to $14.05 in the prior quarter

“I am pleased with the Bank’s performance year-to-date with continued improvement in our net interest margin, and growth in both loans and deposits,” reported Julia Beattie, President & CEO. “The operating environment remains challenging, but we have been focused on expense management to improve profitability and risk management to protect our balance sheet. Our team of bankers continue to focus on serving clients and taking advantage of growth opportunities in the markets we serve,” added Beattie.

Total deposits grew 2.1% during second quarter and 3.0% since December 31, 2023. The increase in deposits during the second quarter was almost entirely in non-interest bearing accounts. “The bank remains focused on retaining core deposit relationships while looking for opportunities to grow new relationships, recognizing that deposit funding costs continue to rise due to competitive pressure,” noted Beattie.

The investment portfolio decreased 2.9% to $144.3 million during the second quarter of 2024 from $148.6 million at the end of the first quarter of 2024. The decrease is the result of monthly principal reductions on the MBS portfolio and matured investments. The bank re-deployed these matured balances into higher yielding loans during the quarter. The average life of the portfolio was 4.0 years at the end of the second quarter, consistent with the prior quarter-end. Securities income was $0.58 million during the quarter, with a yield of 1.61%, versus $0.62 million, and a yield of 1.64% for the first quarter of 2024.

Non-interest income was $2.0 million in the second quarter, flat from the first quarter of 2024. Factoring revenue was down slightly by $21 thousand from the prior quarter.

Non-interest expenses totaled $5.7 million in the second quarter, up $313 thousand from the previous quarter. The increase in non-interest expense during the quarter is partially attributed to expenses incurred on other real estate owned (OREO). During the quarter, the bank sold the last remaining parcel of OREO, having written the property down by $66 thousand during the quarter and booking a loss-on-sale of $5 thousand. The balance of the increase was distributed across remaining expense categories.

As of June 30th, the Tier 1 Capital Ratio for PBCO Financial Corporation was 11.62% with total shareholder equity of $81.0 million, versus a Tier 1 Capital Ratio of 11.38% and total shareholder equity of $78.6 million as of March 31, 2024. The increase in the capital ratio is attributed to net income generated in the quarter, while assets remained flat from the prior quarter. The Tier 1 Capital Ratio for the Bank was 13.44% at quarter-end, up from 13.18% as of March 31, 2024. Tangible Capital was $77.3 million, or 9.80% as of June 30, 2024, versus first quarter of 2024 at $74.9 million, or 9.49%. Ms. Beattie commented, “Our strong capital position allows us to pursue growth, protect shareholder value and continue to serve our communities.”

About PBCO Financial Corporation

PBCO Financial Corporation’s stock trades on the over-the-counter market under the symbol PBCO. Additional information about the Company is available in the investor section of the Company’s website at: www.peoplesbank.bank.

Founded in 1998, People’s Bank of Commerce is a full-service, commercial bank headquartered in Medford, Oregon with branches in Albany, Ashland, Central Point, Eugene, Grants Pass, Jacksonville, Klamath Falls, Lebanon, Medford, and Salem.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as People’s Bank or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe People’s Bank’s business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

Consolidated Balance Sheets
(Dollars in 000's)	6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023
BALANCE SHEET
ASSETS
Cash and due from banks	$	4,679			$	5,592			$	6,926			$	4,502			$	6,021
Federal funds sold		-				-				-				-				-
Interest bearing deposits		16,125				13,303				13,127				15,732				20,469
Investment securities		144,321				148,601				154,228				200,941				220,430
Loans held for sale		-				-				-				449				1,863
Loans held for investment, net of unearned income		552,014				547,229				516,697				511,374				490,378
Total Loans, net of deferred fees and costs		552,014				547,229				516,697				511,823				492,241
Allowance for loan losses		(6,066	)			(6,029	)			(5,863	)			(5,656	)			(5,424	)
Premises and equipment, net		27,752				29,727				30,001				30,334				27,352
Bank owned life insurance		16,911				16,777				16,637				16,479				16,322
Other Assets		32,301				33,550				31,524				36,961				35,470
Total assets	$	788,037			$	788,750			$	763,277			$	811,116			$	812,881
LIABILITIES
Deposits
Demand - non-interest bearing	$	269,634			$	256,558			$	272,945			$	292,230			$	291,981
Demand - interest bearing		167,421				165,547				142,043				131,603				115,844
Money market and savings		195,359				187,329				186,875				187,952				213,715
Time deposits of less than $250,000		10,282				16,697				16,771				20,530				21,017
Time deposits of more than $250,000		5,991				9,420				11,147				9,685				8,078
Total deposits	$	648,687			$	635,551			$	629,781			$	642,000			$	650,635
Borrowed funds		50,426				67,517				49,756				86,190				79,276
Other liabilities		7,929				7,067				6,151				11,545				10,349
Total liabilities	$	707,042			$	710,135			$	685,688			$	739,735			$	740,260
STOCKHOLDERS' EQUITY
Common stock, surplus & retained earnings	$	94,837			$	93,076			$	91,399			$	95,516			$	93,959
Accumulated other comprehensive income, net of tax		(13,842	)			(14,461	)			(13,810	)			(24,135	)			(21,338	)
Total stockholders' equity	$	80,995			$	78,615			$	77,589			$	71,381			$	72,621
Total liabilities & stockholders' equity	$	788,037			$	788,750			$	763,277			$	811,116			$	812,881

Consolidated Statements of Income
(Dollars in 000's)	2nd Quarter 2024				1st Quarter 2024				4th Quarter 2023				3rd Quarter 2023				2nd Quarter 2023
INCOME STATEMENT
INTEREST INCOME
Loans	$	8,271			$	7,907			$	7,399			$	7,071			$	6,757
Investments		584				621				766				880				970
Federal funds sold and due from banks		181				133				195				312				113
Total interest income		9,036				8,661				8,360				8,263				7,840
INTEREST EXPENSE
Deposits		2,276				2,121				1,885				1,580				1,418
Borrowed funds		575				676				794				997				520
Total interest expense		2,851				2,797				2,679				2,577				1,938
NET INTEREST INCOME		6,185				5,864				5,681				5,686				5,902
Provision for loan losses		52				175				286				252				(86	)
Net interest income after provision for loan losses		6,133				5,689				5,395				5,434				5,988
NONINTEREST INCOME
Service charges		118				124				115				119				124
Mortgage lending income		-				-				183				252				275
Steelhead finance income		1,181				1,202				1,192				1,224				1,291
BOLI Income		134				134				155				124				112
Other non-interest income		517				503				633				523				558
Total noninterest income		1,950				1,963				2,278				2,242				2,360
NONINTEREST EXPENSE
Salaries and employee benefits		3,374				3,374				3,804				3,332				3,990
Occupancy & equipment expense		906				881				899				902				875
Advertising expense		118				86				115				118				121
Professional expenses		260				234				206				194				205
Data processing expense		338				316				355				322				317
Loss on sale of investments		-				-				6,814				-				-
Other operating expenses		701				493				724				706				614
Total noninterest expense		5,697				5,384				12,917				5,574				6,122
Income before taxes		2,386				2,268				(5,244	)			2,102				2,226
Provision for income taxes		625				590				(1,338	)			544				571
NET INCOME	$	1,761			$	1,678			$	(3,906	)		$	1,558			$	1,655
Shares Outstanding End of Quarter		5,307,057				5,328,535				5,327,035				5,325,535				5,325,535
Average shares outstanding		5,321,376				5,328,035				5,326,035				5,325,535				5,325,368
Earnings per share	$	0.33			$	0.31			$	(0.73	)		$	0.29			$	0.31

(Dollars in 000's)	6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023
Financial Highlights
Total portfolio loans	$	552,014			$	547,229			$	516,697			$	511,374			$	490,378
Total deposits	$	648,687			$	635,551			$	629,781			$	642,000			$	650,635
Total assets	$	788,037			$	788,750			$	763,277			$	811,116			$	812,881
Net income	$	1,761			$	1,678			$	(3,906	)		$	1,558			$	1,655
Performance Ratios
Return on average assets		0.90	%			0.85	%			-1.97	%			0.76	%			0.82	%
Return on average equity		8.90	%			8.60	%			-22.02	%			8.53	%			9.06	%
Net interest margin		3.49	%			3.31	%			3.19	%			3.07	%			3.22	%
Yield on loans		6.05	%			5.83	%			5.68	%			5.55	%			5.46	%
Cost of deposits		1.41	%			1.33	%			1.16	%			0.96	%			0.84	%
Efficiency ratio		70.03	%			68.79	%			162.29	%			70.31	%			74.10	%
Efficiency ratio excluding non-recurring expenses		70.03	%			68.79	%			72.40	%			70.31	%			74.10	%
Full-time equivalent employees		132				132				132				148				142
Capital
Tier 1 Capital Ratio		11.62	%			11.38	%			11.54	%			11.36	%			11.15	%
Community Bank Leverage Ratio(1)		13.44	%			13.18	%			13.39	%			13.01	%			12.78	%
Book value per share	$	15.26			$	14.75			$	14.57			$	13.40			$	13.64
Tangible book value per share	$	14.56			$	14.05			$	13.86			$	12.70			$	12.93
Asset Quality
Allowance for loan losses (ALLL)	$	6,066			$	6,029			$	5,782			$	4,873			$	5,424
Nonperforming loans (NPLs)	$	1,127			$	412			$	733			$	427			$	677
Nonperforming assets (NPAs)	$	1,127			$	618			$	939			$	713			$	963
Classified assets(2)	$	8,775			$	6,442			$	6,549			$	5,800			$	5,964
ALLL as a percentage of net loans		1.10	%			1.10	%			1.12	%			0.95	%			1.10	%
ALLL as a percentage of NPLs		538	%			1463	%			789	%			1141	%			801	%
Net charge offs (recoveries) to average loans		0.00	%			0.00	%			0.01	%			0.01	%			0.00	%
Net NPLs as a percentage of total loans		0.21	%			0.08	%			0.14	%			0.08	%			0.14	%
Nonperforming assets as a percentage of total assets		0.14	%			0.08	%			0.12	%			0.09	%			0.12	%
Classified Asset Ratio(3)		10.08	%			7.61	%			7.85	%			7.53	%			7.64	%
Past due as a percentage of total loans		0.46	%			0.55	%			0.14	%			0.08	%			0.14	%
End of period balances
Total securities and short term deposits	$	160,446			$	161,904			$	167,355			$	216,673			$	240,899
Total loans, net of allowance	$	545,948			$	541,200			$	510,834			$	506,167			$	486,817
Total earning assets	$	712,460			$	709,133			$	684,052			$	728,496			$	733,140
Intangible Assets	$	3,729			$	3,741			$	3,753			$	3,766			$	3,778
Total assets	$	788,037			$	788,750			$	763,277			$	811,116			$	812,881
Total noninterest bearing deposits	$	269,634			$	256,558			$	272,945			$	292,230			$	291,981
Total deposits	$	648,687			$	635,551			$	629,781			$	642,000			$	650,635
Average balances
Total securities and short term deposits	$	159,413			$	165,584			$	201,788			$	241,049			$	242,315
Total loans, net of allowance	$	547,139			$	536,255			$	504,002			$	493,314			$	489,624
Total earning assets	$	706,552			$	701,839			$	705,790			$	734,363			$	731,939
Total assets	$	785,232			$	787,127			$	794,196			$	821,162			$	811,697
Total noninterest bearing deposits	$	254,771			$	255,204			$	273,413			$	291,470			$	293,331
Total deposits	$	647,351			$	642,420			$	643,015			$	657,331			$	675,579
(1) Effective March 31, 2020, People's Bank of Commerce opted into the Community Bank Leverage Ratio and is no longer calculating risk based capital ratios.
(2) Classified assets are defined as the sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned.
(3) Classified asset ratio is defined as the sum of all loan related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned, divided by bank Tier 1 capital, plus the allowance for loan losses.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240717654268/en/

Julia Beattie, President & CEO

(541) 608-8920, julia.beattie@peoplesbank.bank

Source: PBCO Financial Corporation

FAQ

What was PBCO's net income for Q2 2024?

PBCO Financial reported a net income of $1.8 million for Q2 2024.

How did PBCO's earnings per share change in Q2 2024?

PBCO's earnings per diluted share increased to $0.33 in Q2 2024, up from $0.31 in Q1 2024.

What was the growth in PBCO's loan portfolio for 2024 so far?

PBCO's loan portfolio increased by 6.8% year-to-date as of Q2 2024.

How did PBCO's deposits perform in Q2 2024?

PBCO's total deposits grew by 2.1% in Q2 2024, with non-interest bearing deposits increasing by 5.1%.

What was PBCO's net interest margin in Q2 2024?

PBCO's net interest margin expanded to 3.49% in Q2 2024, an increase of 18 basis points from the previous quarter.